The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History

I read this book and many of the reviews herein both positive and negative. I also read Liam Vaughan’s book The Fix on the same subject. Libor (London interbank offered rate) was created either consciously or unconsciously so that the submitting banks would be motivated to submit their lowest borrowing costs. This would reflect on the credit worthiness of the submitting banks. The higher the submitted rate relative to the other submissions could lead to questions about the banks solvencyThe high and low submissions would be discarded and the rest would be averaged to reflect the daily Libor rate. The Libor rate was the benchmark by which the interest rate of many classes of debt would be set like home mortgages, car loans, commercial loans et. cet., world wide.However derivatives based on the Libor came along (bets where the Libor rate would be in the future, 3,6,9 months out et. cet.) and are not loan transactions. Derivatives based on agricultural commodities have been around for a long time. Libor was formally adopted as a bench mark in 1986. Financial derivatives mushroomed into huge gambles in the late 2000s. By 2013 $300 trillion in derivatives, mortgages and other contracts including U.S student loans were tied to the Libor rate. Derivatives are also highly leveraged bets usually between large banks some of which are submitters to the Libor rates. Participation in the derivatives market is not limited to banks and hedge funds: individuals, pension funds, endowments and others can participate. During the Clinton Presidency commercial banks and investment banking merged. Which meant that the two types of banking which had been separated during the Great Depression now were joined under the same roof and a bank could use depositors money to gamble on all types of derivatives including Libor derivatives. Banks can now gamble with your money. Libor rate derivatives are regulated by the Commodities Futures Trading Commission located in Chicago.The submitting banks generally have billions of dollars riding on their derivative bets on the Libor rate. Therefore they would have a bias to try to move the Libor to favor their derivative bets either up or down depending on their positions. A movement of a few basis points ( A basis point is one hundredth of a percentage point.) meant profits of hundreds of thousands of dollars. Thousands of these derivative bets are made daily during the business week.This book is the story of Tom Hayes a math whiz and a probably somewhat autistic trader who along with others, both inside his employer banks and at other banks and brokerages, conspired to move the rate to favor their banks trading positions.After the crash of 2008 which was attributed to the financial sector, regulators were looking to hold some one accountable since none the Wall Street titans and others in Europe were never criminally held responsible for nearly destroying the world’s financial system by their abusive practices involving property related derivatives.The Libor manipulations while not related to the 2008 financial crash was the closest thing the regulators could find to criminally punish one bank trader out of hundreds if not thousands of participants as a poster boy.Tom Hayes a super star trader whose trading volume only involved approximately 5% of Libor related trades was singled out for criminal punishment. His other co-conspirators, both senior management, supervisors, co-employees and people at other banks were not sent to jail. Hayes the low hanging fruit received 14 years.The author made this account highly readable by narrating the lives, hopes and desires of the participants and their interrelationships. It was an enjoyable read although I am not involved in finance as a professional

Quite a detailed story on the ins and outs of the LIBOR scandal. Seem to feel sorry for the guy by the end given what happened to the others.Definitely worth picking up and reading. Hard to put down as the story is quite captivating

I had to order it immediately after I finished Dark Towers because it was such an unexpectedly fun book. Neither book is about a topic I usually want to read more than newspaper articles about: banking history and scandals. But he’s such an entertaining writer, it’s like reading a mystery or thriller. This one was more in my wheelhouse because I was quite interested in the LIBOR scandal after learning a tiny bit about LIBOR due to my research about variable rate mortgages.It was so bleeping good again! He’s so great at taking tons and tons of information (interviews, texts, emails, court docs and on and on) and turning into a story with clear plot lines, suspense, comprehensibility of complex ideas, empathy, and seriously fascinating storytelling. He’s just really good at this. Like Tom Hayes’ beloved Michael Lewis. I don’t know what it is that makes some books so dry and hard to read and others just flow in a super enjoyable way, but this guy gets the flow. Banking! My dad was shocked when he found out I’d paid for two banking books and totally loved them.

This is an excellent and well researched book which I would highly recommend to anyone who is interested in Financial Markets or in better understanding the LIBOR scandal. The book reads partly as a documentary of what actually happened and how Tom Hayes ended up being charged and found guilty of being the mastermind behind the scandal and it also reads in some ways as a racy novel, it is compulsive reading. The story is ultimately very sad because Tom Hayes, due to his aspergers' found himself surrounded by people and an environment he probably didn't really understand. He thought people that were ready to use, manipulate and ultimately betray him were his friends. The more street wise wide boy brokers got off, because they knew how to get themselves out of a corner. The book plus the recent BBC Panorama program might, just might cause the authorities to take a second look at the case. I hope they do. It seems unbelievable that none of Tom Hayes superiors were even questioned or charged, when it is clear that everyone knew what was going on and the banks made millions in profit.. Did Tom Hayes really break the law when he asked to get the rate at his chosen level, but within the acceptable threshold? For me he didn't. Well done to the author, this must have been a herculean effort to collate and sift through all the information and to get it into an order ready for presenting in the book.

It was a good product and product worth for money youCan buy trustly

Outstanding reporting. I was so absorbed I had to read it a second time. It does read like a thriller but unfortunately this is a true account. How some of these guys got away with this blows a person's mind. Very absorbing and fabulous account. It is complicated following the details of trading if one isn't at all familiar but boy oh boy you pick it up as you go along.Fantastic read.

A really excellent and fascinating account of the blatant and self-serving endeavours of an investment bank trader who used his own and others efforts to skew the interbank lending rates in favour of his trading positions. Tom Haynes was a Maths Genius who suffered from Auberges resulting in a somewhat chaotic, awkward, brusque personality, who made alot of money in salary and bonuses trading for Barclays, then UBS and finally at Citigroup and who enlisted the support of many colleagues both below and above him to influence LIBOR for gain.In addition to those colleagues and supporting Brokers who actually helped, there were many more in his various firms in very senior positions who were fully aware of what was being done but because good profits were being generated, were more than happy to let the 'gravy-train' keep rolling.Yes Tom Hayes was guilty of manipulation, but so were many others equally guilty but for some baffling reason known only by the Serious Fraud Office, the whole wrath of the Gods only rained down on this guy. Strange, perplexing, extremely worrying.An excellent, gripping read from start to finish. David Enrich sure can tell a good yarn!

Very gripping, great story-telling, highly readable

Great book. The author navigated a fine line between generating empathy for the main character and the crashing reality of legal system. Eventually the law caught up with him.